This is a very interesting follow up to this article on Groupon. It was written by a patient who is also a friend and a very smart lady, Francine Hardaway. I am a member of her study group Stealthmode and she sent it to me as an e-mail. However it was published online by Fast Company and is linked below. Well worth reading before jumping into online group buying services like Groupon.
Group buying attracts the wrong customer–not only the ones who won’t tip, but the ones who won’;t come back, the ones who can’t afford the product at full price, the ones who already know the business and would come anyway but now get half off…
I predict that the following will happen:
- local businesses will be confronted by a confusing array of group buying “marketing” opportunities
- consumers will begin assigning the daily emails to a folder they never check
- salespeople on the ground will have a more and more difficult time meeting their goals
- the companies will have enormous churn and management/training issues with the sales force
- there will be an implosion heard around the world as the mergers and acquisitions happen in an effort to buy market share.
And at that point, the founders of Groupon need to have made their exit. Groupon was a phenomenon of the Recession, not of the Recovery.